On Thursday, the Bank of England reduced its base interest rate from 4.25% to 4%, marking its fourth cut in the last 12 months and the lowest level since March 2023. The decision followed an unprecedented two-round vote by the Monetary Policy Committee, reflecting deep divisions amid persistent inflation and economic stagnation. While inflation remains elevated at 3.6%, the Bank anticipates a peak of 4% in September before easing toward its 2% target by 2027. Sterling rose 0.4% against the dollar to $1.341 immediately after the announcement and continued to strengthen through the rest of the day. The two-year gilt yield rose to 3.87% as traders lowered their expectations of a further rate cut this year.
While inflation remains elevated at 3.6%, the Bank anticipates a peak of 4% in September before easing toward its 2% target by 2027.
Former star fund manager Neil Woodford has been fined £5.9mn and banned from managing retail funds or holding senior roles, following a damning investigation by the Financial Conduct Authority. His firm, Woodford Investment Management, was also fined £40mn for mismanaging the liquidity of the Woodford Equity Income Fund, which collapsed in 2019, trapping £3.6bn in investor assets, having plunged from a peak value of £10.1bn in 2017. The FCA found Woodford made “unreasonable and inappropriate investment decisions,” prioritising illiquid assets that breached rules requiring investor access within four days. Woodford and his firm have referred the case to the Upper Tribunal, contesting the findings and blaming the fund’s administrator, Link Fund Solutions. The scandal, which affected over 300,000 investors, is considered one of the most significant failures in UK asset management history.
Former star fund manager Neil Woodford has been fined £5.9mn and banned from managing retail funds or holding senior roles, following a damning investigation by the Financial Conduct Authority.
President Trump has announced 100% tariffs on computer chips and semiconductors made outside of the US, a move likely to raise prices on electronics from TVs to smartphones. The announcement coincided with Apple CEO Tim Cook pledging an additional $100bn investment in US manufacturing, including relocating smartwatch and iPhone glass production to Kentucky. Trump praised the shift as a “significant step” toward making iPhones entirely in America. Apple’s stock surged nearly 6%, with analysts viewing Cook’s announcement as an olive branch to the administration. Meanwhile, India faces a 50% tariff starting August 27 due to its continued purchases of Russian oil.
Our specialist's final thought
"President Trump has announced 100% tariffs on computer chips and semiconductors made outside of the US, a move likely to raise prices on electronics from TVs to smartphones. The announcement coincided with Apple CEO Tim Cook pledging an additional $100bn investment in US manufacturing, including relocating smartwatch and iPhone glass production to Kentucky."
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